Daily Management Review

American Firms Could Start Selling To Huawei Again In Two Weeks: Reuters


American Firms Could Start Selling To Huawei Again In Two Weeks: Reuters
American companies may be allowed to start selling their products and technologies to Chinese tech firm Huawei as soon as in two week, reported news agency Reuters quoting information from a senior United States government official. This is also an indication that the reduction of restrictions on the Chinese company by President Donald Trump could be a fast paced one.
The US Commerce Department in May added Huawei which is the largest telecom equipment maker and the second largest smartphone maker of the world, to its so called ‘entity list’ that effectively prevented all American companies form doing any business with Huawei as well as from sharing or renting out any propriety technology to the Chinese firm except with a special permission from the US government.
However trump reversed his decision about Huawei and said that it would be possible for American companies to sell to Huawei after his meeting at the end of June with the Chinese president Xi Jinping on the sidelines of the G20 Summit in Osaka, Japan. An more recently, Commerce Secretary Wilbur Ross had said that the government would issue licenses to American firms to do business with Huawei in cases where there is no threat to national security.

the intense lobbying of the US chip industry with the Trump administration and the political pressure from China over the Huawei issue is reflected by Trump’s reversal and the pace of implementing it by the US Commerce Department. Many market experts see a bright possibility of restart of sale of US technology to Huawie soon.
Following Ross’s comments, two US chip makers had said that they would apply for more licenses from the Trump administration to do business with Huawei, reported Reuters citing company source information.
According to Craig Ridgley, a trade compliance consultant in Washington, it is also likely that in the coming days, applications for similar licenses could also be applied by a customer response management company and a firm that simulates cross-sectional radar for Huawei, reported Reuters.
In 2018, Huawei spent about $11 billion in purchasing from US companies such as Qualcomm, Intel and Micron Technology out of its total annual purchase of about $70 billion.
“Since there’s no downside, companies are absolutely submitting applications, as required by the regulations,” said Washington lawyer Kevin Wolf, a former Commerce Department official.
“The Entity list restrictions should be removed altogether, rather than have temporary licenses applied for US vendors. Huawei has been found guilty of no relevant wrongdoing and represents no cybersecurity risk to any country so the restrictions are unmerited,” a Huawei spokesman reportedly told Reuters.
Under the current regulations, US firms can only sell those goods to Huawie that are essential in maintaining the existing networks of the company and for providing software updates to existing Huawei handsets. But none of the American companies are allowed to make any fresh sale of products or technology to Huawie that is made in the US.